70% of CEOs reckon their network is slowing business growth, NTT says

Telecommunications, technology and business solutions provider NTT has revealed that 70% of CEOs believe their network is impeding business expansion.

In the new NTT 2022 Global Network Report, the group surveyed more than 1,300 enterprise networking professionals in 21 countries. The survey revealed gaps and challenges as businesses worldwide modernize networks to enable business growth.

While 95% of organizations recognize the importance of networks as the backbone of digital transformation, only 50% of those surveyed admitted that their company aligns network technology with business goals and priorities.

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The majority (80%) embrace innovations like edge, cloud, 5G, artificial intelligence and machine learning, yet 70% struggle to keep up with the pace due to rising technical debt and lack of expertise. Additionally, security and compliance in network architectures are becoming a top concern. Other challenges include “lack of use cases and perceived return on investment,” budget constraints and vendor capacity as top challenges.

Innovation moving faster than maturity

NTT explains that the adoption of hybrid, distributed work environments with multiple connected devices is erupting through enterprises. However, despite investments, just two in five businesses say they are very satisfied with their current network capabilities.

71% of organizations say they lack the in-house skills to operate modern network technology and lack the skills and resources to drive network and business-as-usual development initiatives. While companies have been agile in adopting hybrid technologies, cloud migration, 5G and AI, reaching maturity and excelling in using new technologies remains a challenge.

The NTT report surfaces in the midst of global market disruptions. Global volatility, and unpredictable economic, social, environmental and political forces, sided with the challenges of deploying new technologies, are forcing organizations to evaluate their business strategies and IT investment decisions.

On the other hand, cybersecurity, nation-state attacks and the intense international cybercriminal landscape are also perceived as major risk factors. This has inspired organizations to move to more centralized, cloud-based security solutions and a managed endpoint security model.

“Levels of investment in the network have surged, with the results of this research showing many organizations are leaning towards key partners and managed service solutions to fulfill their requirements,” said Amit Dhingra, executive vice president at NTT.

NTT’s latest survey says that more than 90% of senior executives prefer the network-as-a-service model due to its potential to scale up and down. Technical complexities such as deploying effective AIOps, automation solutions and simplifying ongoing network operations make the network as a service model more attractive.

“Businesses should consider security, skills competency, ability to scale, private 5G and software-defined networking when selecting a network service provider,” Dhingra said. “In the long term, blockchain, further AI and automation, AR and VR, quantum networking, 6G and photonic computing will affect how networks are delivered.”

Understanding the need for the modernization of networks

Companies are awakening to the need for network modernization to support the technologies that can drive the performance that customers demand. NTT says that technologies on the rise include blockchain and cryptocurrencies, augmented and virtual reality, 5G, AI analytics and AIOps. All these trends require advanced network capabilities to manage data traffic with speed, security, agility and low latency.

“To support the networking requirements of emerging digital services and applications, organizations are modernizing their enterprise networks, allowing for more efficient use and management of the networks that underpin their enterprises,” said Chris Bernard, vice president of CDK Global.

Barnard explained that organizations that have not invested risk negatively affecting their growth opportunities. The network plays a fundamental role in digital transformation strategies, distributed working and processing.

“We can expect to see more enterprise network upgrades as technologies such as AI and security defenses are layered onto mainstream enterprise networking,” Barnard said.

The NTT report shows that nine of the 10 top performers are accelerating their investment in new technologies and have plans to deploy edge, multi-cloud and private 5G networks in the next two years. However, over 70% of these top performers are outsourcing most of their network infrastructure to an external managed services provider.

Top performers’ priorities are:

• Digital transformation
• Growth: Increasing revenue/profits/margins
• Innovation: Adopting new solutions and technologies
• Enabling employee productivity and effective collaboration
• Brand value growth

Businesses that recognize the value of the network outperform their peers. Networks have moved away from just being a motivation factor to being true differentiators. Nine in ten top performers agree that dependency on networks will grow in the next two years.

“Without having a proper, secure network and an end-to-end understanding of that network to enable your organization, you won’t be able to achieve your business outcomes,” Dhingra said.

What to do next to future-proof your network

NTT ended its new report with seven points for leaders to consider when future-proofing their network. The group says that the first step for organizations is to align business goals and break down silos, making sure they plan clearly how to achieve a return on investments.

Companies should also think about availability, scalability and performance, and invest in a technology partner that can help migrate legacy network assets that are creating technical debts. Automation and vendors can also relieve the burden of manual support while managing fast, secure and agile new networks supported by cloud models.

“To move your organization forward, look to the network-as-a-service model to consume and pay just for what you need while allowing you to access the latest trends in technology,” NTT said.

The network and the operational technology must also work together in an end-to-end approach. In-house network resources may be challenging for companies, but outsourcing and partnering can drive evolution.

Finally, leaders must keep in mind the increasing demands for compliance and security while shopping for services aware of hidden costs.

“An MSP’s capabilities, track record, client relationships and governance are all important factors to consider,” NTT added.

Large, medium and small organizations have the technology and resources to modernize and continue their digital transformation, despite the many challenges that network modernization presents. As networks prove to be the lifeline of new technologies, failing to invest in them can be devastating. The global cloud, edge, 5G, metaverse and the new hybrid world can only be supported by advanced networks.